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15th April 2014

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Perception gap persists on retail rentals: MP

Source: Today Online / Singapore

SINGAPORE — While official data point to retail rental increases
that are broadly in line with inflation, the on-the-ground perception is that
some landlords have raised rents by much more than that, with some asking for
double when leases are up for renewal.

Member of Parliament Denise Phua (Moulmein-Kallang) made this
point yesterday when she asked Minister of State for Trade and Industry Teo Ser
Luck how the numbers are compiled after he said in Parliament that, based on
data from January 2012 to May 2013, the median increase in rentals upon renewal
was in line with inflation.

“No matter what the Government says, that perception seems to be
persistent,” said Ms Phua, who said that “there seems to be quite a number of
data points that suggest that retailers, when they negotiate for tenancies
which expire” were asked for rental increases of as much as 100 per cent.

Mr Teo replied: “Of course there are different experiences and
practices between landlords and tenants because of the contractual
arrangements. Also at different locations they will experience different
commercial practices.”

About one in 10 tenants experienced cumulative increases in rental
of more than 50 per cent, and these tended to be those renewing their leases
after more than four years, or who had units in more attractive locations, he
said.

Mr Teo added that the Government is looking into publishing more
comprehensive rental data for retail and industrial space by this year.

In compiling data on rentals, the intent as much as possible is to
look for “the sources which make sense, maybe geographical points, how high or
how low the rental index is in that area”. But this will not include data so
specific that it relates to individual buildings, Mr Teo said.

He was initially responding to a parliamentary question by MP Lee
Bee Wah (Nee Soon) on whether the ministry is able to take steps to moderate
rentals for SMEs to help them cope with rising operating costs.

To do this, he said, the government will be releasing an average
of 500,000 sq m of multiple-user factory space annually for the next three
years — almost double the annual space demanded for the past three years.

This is to ensure enough supply for businesses
planning for the long term

Source: Business Times / Singapore

THE government will make more factory and shop space available
over the next three years to ensure there is enough supply for businesses as
they plan for the long term.

Minister of State for Trade and Industry Teo Ser Luck said in
Parliament yesterday that an average of 500,000 sq m of multiple-user factory
space will come on-stream each year for the next three years.

This, he said, is nearly double the average annual demand for such
space in the last three years, and is expected to moderate industrial rentals
further.

Industrial rentals, he noted, remained largely stagnant from 2000
to 2006, before seeing an uptick in 2007 and then declining during the global
financial crisis that followed.

Retailers and
industrialists can expect rents to decline in the coming years, said Minister
of State for Trade and Industry Teo Ser Luck yesterday. In the next three
years, about 500,000 sq m of multiple- user factory space will become available
each year.

[SINGAPORE] Growth in the first quarter was a disappointingly slow
5.1 per cent compared with a year earlier, but economic activity is expected to
pick up to a moderate pace for the rest of the year. Inflation, however,
remains a sticky problem.

In light of this, the central bank has decided to keep the
Singapore dollar appreciating along the same "modest and gradual"
path it has stuck to since April 2012 - to ward off persistent wage pressures
that will push core inflation higher.

The Monetary Authority of Singapore's (MAS) core inflation measure
- which excludes more volatile car and home prices - has risen to an average of
2 per cent year-on-year over the five months from October 2013 to February this
year, from 1.6 per cent in the first nine months of 2013.

"This was predominantly due to a more significant
pass-through of wages and other business costs," the central bank said.
And despite the strengthening currency and subdued price pressures abroad,
import prices in Singapore dollars also rose slightly in recent months, it
said.

Market economists had accurately predicted both the policy
decision, as well as the lower 2014 headline inflation forecast. MAS downgraded
this to 1.5-2.5 per cent from an earlier 2-3 per cent given that the large
supply of new housing units implies a weaker outlook for imputed rentals and
car prices should "add negligibly" to inflation.

But this lower headline inflation forecast remained
"subservient" to elevated core inflation when it came to the policy
decision, as OCBC currency strategist Emmanuel Ng put it.

Indeed, MAS warned that though imported inflation will be benign,
domestic costs - particularly wage pressures from the tight labour market -
could mean that sequential core price increases will be slightly higher than
the historical average this year.

"Firms are expected to continue to pass on accumulated costs,
which could lead to broad-based price increases across the economy," MAS
said.

The policy trade-offs of the central bank's decision this round
were fewer, as the economy is expected to trot out a modest pace of recovery,
notwithstanding the uncertain start in Q1.

Advance estimates released by the Ministry of Trade and Industry
(MTI) show that Q1 GDP growth came in weaker than the market had expected,
moderating in both year-on-year and sequential terms.

The economy expanded 5.1 per cent in Q1 compared to a year ago -
lower than Q4's 5.5 per cent - as a slowdown in the services sector dragged
down gains from the manufacturing sector.

Overall GDP fell short of the consensus forecast. The 18 private sector
economists polled by Bloomberg had a median year-on-year growth forecast of 5.4
per cent.

Growth in the services sector eased to 4.7 per cent compared with
a year ago, lower than the 5.9 per cent growth seen in Q4. This was due to
slower expansion in the wholesale & retail trade, and finance &
insurance sectors.

Despite the slip, Mizuho economist Vishnu Varathan believes that
the services sector will remain a key pillar of growth this year. And DBS's
Irvin Seah expects Q1 GDP to be adjusted upwards in May, "given the
current conservative estimate in terms of (services') growth momentum".

The manufacturing and construction sectors, however, performed
better. Manufacturing grew at a faster pace of 8 per cent in Q1, boosted by
higher biomedical and chemicals output. The latter benefited from public
construction projects, and grew 6.5 per cent year-on-year.

Despite the weaker-than-expected showing in overall Q1 GDP, both
the government and private sector economists remain sanguine about growth
prospects this year.

Notwithstanding Q1's weaker performance, MAS said that "the
level of economic activity should stay on a broad upward trajectory for the
rest of the year".

Economists Michael Wan of Credit Suisse and Francis Tan of UOB
agree. They say that Singapore's trade-related sectors should expand as the
global economy - and particularly the US and Europe - stages a stronger
recovery.

Still, the MAS warned that "overall growth will be capped by
supply-side constraints, particularly in the labour market".

The government has maintained its 2014 growth forecast of 2-4 per
cent, even as it warned that "the growth profile could be uneven".
Economists' projections are largely at or beyond the upper end of this band,
with growth forecasts ranging from 3.5-4.3 per cent.

While the next policy review is not due till October, economists
from ANZ and Credit Suisse believe the hurdle for easing monetary policy is
"still extremely high". Mr Wan noted that the tightness in the labour
market showed no signs of easing, given that a fresh round of foreign manpower
restrictions are due in July, with more to come in 2015 and 2016.

-By Kelly Tay & Teh Shi Ning

MAS cuts inflation forecast, but wage pressure remains

Source: Today Online / Business

SINGAPORE — A large supply of newly-completed homes will put a lid
on housing rentals and help ease inflation this year, but the persistently
tight labour market will continue to pile pressure on consumer prices as
businesses pass on higher wage costs.

This was highlighted yesterday by the Monetary Authority of
Singapore (MAS) in its latest semi-annual monetary policy statement, as the
central bank maintained a modest and gradual appreciation for the Singapore
dollar exchange policy band.

“This policy stance, which has been in place since April 2012, was
assessed to be appropriate taking into account the balance of risks between
external demand uncertainties and rising domestic inflationary pressures,” the
MAS said.

“The outlook for the global economy has brightened, anchored by
improving prospects in the G3 (the US, eurozone, Japan) as a whole. Against this
backdrop, Singapore’s trade-related sectors should grow at a moderate pace,” it
added.

“Nevertheless, overall growth will be capped by supply-side
constraints, particularly in the labour market … Wage pressures will persist
and firms are likely to pass on business costs to consumer prices,” it warned.

Credit Suisse analyst Michael Wan said: “The central bank remains
concerned about the resultant impact on wage growth and underlying price
pressures. While headline inflation has come down and could continue to
moderate, the underlying inflationary pressure in the economy is still there
and may remain so for the next two years.”

Against this backdrop, MAS maintained its 2 to 3 per cent forecast
for full-year core inflation, which excludes accommodation and private road
transport costs. This reflects the uptrend since last year, when core inflation
accelerated from the 1.6 per cent average between January and September 2013 to
the 2 per cent average between October and February this year.

But overall inflation is expected to be tamer, with the all-items
consumer price index forecast at 1.5 to 2.5 per cent this year, a downward
revision from the MAS’ previous 2 to 3 per cent estimate. The revision was made
due to expectations of lower rentals this year, when around 24,000 public
housing units and 20,000 private homes will be completed.

[SINGAPORE] The Monetary Authority of Singapore (MAS) made clear
yesterday that it "stands ready to curb excessive volatility" in
Singapore's currency, backing the market's view that the central bank has been
intervening in the currency markets in recent weeks.

Analysts highlighted the explicit mention of this, which has not
surfaced since MAS' policy statement of April 2010 when fears of a eurozone
collapse caused turmoil in global financial markets, and said it was made in
the light of potential volatility.

This was probably prompted by anxieties about market volatility
when the US Federal Reserve ends the tapering of its quantitative easing
programme and the fed fund rate starts to rise, as well as geopolitical
tensions in Ukraine, and concerns over growth in China, said Maybank's FX
research team.

Hence, while MAS deemed it appropriate to stick to its policy
stance of a "modest and gradual" appreciation in the Singapore
nominal effective exchange rate (S$NEER) - the value of the Singapore dollar
relative to currencies of its major trading partners and competitor - it
stressed that it would "continue to be vigilant over developments in the
external environment, including in the financial markets".

Colliers and DTZ
see total real estate investment volume falling 13-20% in '14

Source: Business Times / Property

RESIDENTIAL investments made up a significant 41 to 45 per cent of
real estate investment activity in Q1, according to various property
consultants' research reports, but overall this is expected to come in lower
this year.

This is because of a number of factors. Firstly, the combined
effects of cooling measures and the Total Debt Servicing Ratio framework have
softened demand and led to weaker transaction volumes in the private
residential market, which have dampened the residential en bloc sales market. Secondly,
the government has moderated its supply of residential sites in H1 2014 due to
the large pipeline supply - though the cut in land sales is across the board,
extending also to commercial and hotel sites.

The third factor is the interest rate increases, expected to kick
in when the United States begins tapering its quantitative easing programme
next year, which could raise financing costs and become a drag on investment
activity.

According to a DTZ Research report released yesterday, in the
first three months of this year total real estate investments rose 24 per cent
quarter on quarter to $4.7 billion, with residential and office investments
accounting for $3.7 billion, or nearly 80 per cent of the overall volume.

The first-day
preview of Hong Leong Holdings' Commonwealth Towers drew a crowd of more than
1,500 people on Sunday. The turnout was so large that Hong Leong had to
extend the preview hours - originally scheduled fromnoon until 8pm - by
another two hours.

Vanke chairman also accepts NUS's invitation to
be a professor of practice

Source: Business Times / Property

[SINGAPORE] The chairman of China's top developer Vanke yesterday
shared the story of his journey in pioneering green homes in China at a seminar
at the National University of Singapore (NUS), where he also accepted the
university's invitation to be a professor of practice.

Wang Shi, who will share his experience at the NUS Business School
and the NUS Department of Real Estate, joins NUS's group of practice-track
professors such as former CapitaLand chief executive Liew Mun Leong.

At the seminar organised by the two NUS faculties yesterday, Mr
Wang, recently a visiting scholar at Harvard, said that the move towards
developing green buildings at Vanke boiled down to one word -
"choice".

Inspired by his mountain-trekking adventures and a trip to the
Amazon, the avid trekker made that choice to go green at a time when there were
no government incentives or subsidies to do so. He said: "If we don't change
now, we will eventually be forced or penalised to change by regulation. While
the market is still good and investment in research and development is still
affordable, adjustment is less painful."

SINGAPORE: The government is considering allowing some couples
to co-rent larger flats under the Parenthood Provisional Housing Scheme (PPHS),
National Development Minister Khaw Boon Wan said.

He said more than 900 of the 1,150 PPHS flats have been taken
up, but there are still some larger flats available.

He added the number of applications per month peaked at 409 last
September but has since dropped to 81.

Mr Khaw was responding to a parliamentary question from Hougang
SMC MP Png Eng Huat, on whether the National Development Ministry would
consider lowering rental rates to encourage take-up for the bigger flat types.

Mr Khaw said PPHS rents are 40 to 60 per cent lower than market
rents in the vicinity.

He added the cost of providing PPHS flats includes retrofitting
them before they are rented out, as well as maintenance costs.

PPHS was extended to all married and fiancé-fiancée couples who
booked uncompleted Build-To-Order flats last year.

Separately, Mr Khaw said the ministry does give priority to
families with children in their new flat applications.

This is done through the Third Child Priority Scheme and the
Parenthood Priority Scheme.

Mr Khaw said: “Under both schemes, a fixed quota of flats is set
aside for these families. This ensures a better chance of success, as compared
to giving them more ballot chances.

“HDB also does not restrict the priority given to families with
children to only four-room or larger flats. This is to allow them to choose the
flat type that best suits their budgets and needs.”

-
CNA/xq

Govt
could let couples co-rent larger PPHS flats: Khaw

Source: Today Online / Singapore

SINGAPORE — After peaking at 409 applications last September, the
number of applications for the Parenthood Provisional Housing Scheme (PPHS) has
dropped to 81 and the Government is looking at allowing couples to co-rent the
larger flats still available under the scheme.

More than 900 of the 1,150 flats under the scheme have been taken
up and some larger units under the initiative are still available, said
Minister for National Development Khaw Boon Wan in Parliament yesterday.

“We are considering allowing some couples to co-rent these larger
flats,” Mr Khaw told the house.

He was responding to questions about the scheme from Hougang
Member of Parliament Png Eng Huat, who also wanted to know about the formula
for calculating rents.

Mr Khaw said rents under the scheme are 40 per cent to 60 per cent
lower than market rents in the vicinity and the cost of providing flats
includes the cost of retrofitting the units before they are let out as well as
the cost of managing and maintaining the properties.

Introduced in March last year as part of the marriage and
parenthood package, the scheme provides an option for couples who need
temporary housing at affordable prices, while waiting for their new Housing and
Development Board flats to be ready.

[SINGAPORE] In a move to simplify its group structure and enhance
its strength in integrated projects, CapitaLand has launched a $3.06 billion
voluntary cash offer for CapitaMalls Asia (CMA) to privatise the 65.3 per cent
subsidiary.

Delisting CMA will make the group more nimble, enabling it to
react faster to increased opportunities in integrated projects here and in
China, CapitaLand chief executive Lim Ming Yan said yesterday.

The offer price of $2.22 per share represents a 23 per cent
premium to CapitaMalls' closing share price of $1.80 last Friday. It is also at
a 27 per cent premium to the past one-month volume weighted average price
(VWAP) of CMA shares and a 20.7 per cent premium to CMA's net asset value per
share as at Dec 31.

Arthur Lang, CapitaLand group chief financial officer, described
it as a "fair price", one which reflects an attractive premium for
minority shareholders.

The offer, funded by internal resources and borrowings, factors in
the growth of CMA since its listing in 2009 and the dividends paid out to
shareholders over the years, he said.

CapitaMalls, which manages 105 shopping malls, derived 43 per cent
of its revenue from China last year, 32 per cent from Singapore and the rest,
mostly from Japan and Malaysia.

The deal is immediately earnings accretive to CapitaLand's
shareholders and raises the return on equity from 5.4 per cent to 6.7 per cent.

Analysts responded positively to the offer yesterday; at least one
"outperform" rating was issued.

Standard Chartered analyst Regina Lim, who reiterated the
"outperform" call, said investors may switch to CapitaLand from CMA
to access the latter's well-differentiated retail platform.

"We believe the transaction is a good way to redeploy the
cash that CapitaLand received from the divestment of Australand," she
said, in a reference to CapitaLand's March sale of its remaining 39.1 per cent
stake in Australia's Australand Property Group for around A$849 million.

OCBC property analyst Eli Lee said the offer price is
"decent", given that it represents a 21 per cent premium to book
value and a reasonable 8 per cent discount to revised net asset value.

"CMA's shares have mostly traded below its IPO price ($2.12)
since its listing in 2009, due to various structural and macro-economic
headwinds, and this provides an opportunity for investors to exit at a
reasonable valuation," he said.

The trend here and in China now leans towards integrated projects
- those comprising hotel or serviced residence, retail, office and residential
components; some pure residential players in China have also moved into mixed
developments, CapitaLand's Mr Lim observed.

The individual components of an integrated project complement one
another: pre-sales of residential units generate cashflow to fund the shopping
malls and offices, and serviced residences provide the traffic to the malls and
higher returns for tenants.

It is not easy for a single business unit like CMA to undertake
such projects, he said. Yet, at the same time, having the shopping mall entity
listed "makes it more cumbersome for (CapitaLand) to undertake such
projects".

Post-delisting of CMA, CapitaLand's structure will be further
streamlined. The number of listed entities in the CapitaLand group will be cut
from eight to six, Mr Lim said. Development activities will be undertaken by
CapitaLand, while most of its stabilised assets will be held in listed Reits.

There will be no downstream offer for the Reits - CapitaMall Trust
and CapitaRetail China Trust - where CMA remains their sponsor with respective
deemed stakes of 27.6 per cent and 37.1 per cent.

Morgan Stanley and Credit Suisse are advising CapitaLand on the
transaction.

CapitaLand's offer for CMA shares will turn unconditional when 90
per cent of all CMA shares are obtained. CMA said yesterday that its board of
directors will form a committee to appoint an independent financial adviser to
advise the board on the offer.

-By Lynette Khoo

CapitaLand
offers S$3.06b to buy out shopping mall unit

Source: Today Online / Business

SINGAPORE — CapitaLand has offered to take its shopping mall
subsidiary private by buying over the rest of the shares it does not already
own for about S$3.06 billion, in a move that will allow it to better navigate
its core markets amid an increased focus on mixed developments.

CapitaLand, South-east Asia’s largest listed developer, said
yesterday it has bid S$2.22 a share for CapitaMalls Asia (CMA), a 23 per cent
premium to its closing price last Friday. Trading in the shares of both
companies was halted yesterday.

CapitaLand owns 65.3 per cent of CMA, which assets include ION
Orchard and Plaza Singapura. The purchase will be funded through a combination
of internal cash resources and borrowings.

President and Group Chief Executive of CapitaLand Lim Ming Yan
said integrating CMA into the group operations is a strategic move that will
allow CapitaLand to be more nimble in reacting to changing conditions in its
core markets in Singapore and China.

“The market has changed. A few years ago we saw pure play
residential players, but when you look at the market now, companies are already
starting to move into mixed developments and going into different asset
classes,” said Mr Lim at a media briefing yesterday.

Mr Lim added CapitaLand and CMA had over the past two to three
years collaborated on several mixed developments, but that the cooperation was
“cumbersome” as both are separately listed entities.

“The fact that CMA is listed (separately) means we have to observe
certain corporate governance requirements and all these make it a bit more
cumbersome (and) slower for us to respond to the market,” he said.

“Given that going forward we are seeing more of these
opportunities, I would say it makes sense for us then to … collapse into one
entity, it will allow the group to be more nimble, we can react faster to the
competition.”

Analysts generally favoured the move. Standard Chartered’s Head of
Asian Property Research, Ms Regina Lim, told Bloomberg: “CapitaLand is doing a
lot more integrated projects compared with when they did the listing of
CapitaMalls, so the deal is a good investment by CapitaLand.”

CMA was listed in Singapore in November 2009 after a S$2.8 billion
initial public offering, the nation’s second-largest IPO at the time.

Privatising CMA will also allow CapitaLand to have more
flexibility to access and allocate capital across its different business units
and direct its resources in a manner that “best enhances shareholder returns”,
the company said.

The deal will raise CapitaLand’s earnings per share for its 2013
financial year by about 21.5 per cent and improve the return on equity as at
end-December from 5.4 per cent to about 6.7 per cent on a pro forma basis.

“The transaction unlocks shareholder value … as it is expected to
be immediately accretive. There will also be revenue and costs synergies
achieved through the delisting of CMA, which comes from reduced listing costs
and flexibility to mobilise services and sources within the group,” said Mr Lim.

-By Lee Yen Nee

CapitaLand Offers S$3.06 Billion to Buy
CapitaMalls Asia

Source: Bloomberg / News

CapitaLand Ltd. (CAPL), Southeast Asia’s biggest developer, offered to buy the rest of its mall unit for about S$3.06 billion ($2.4 billion) to consolidate some businesses and boost returns.

The developer bid S$2.22 a share for CapitaMalls Asia (CMA), the Singapore-based company said in a statement to the stock exchange today, a 23 percent premium to the last closing price on April 11. Trading in shares of both companies was halted before the announcement.

CapitaLand, which owns 65.3 percent of CapitaMalls Asia -- whose Singapore malls include ION Orchard and Plaza Singapura along the city’s famed Orchard Road shopping strip -- sold shares in the unit in 2009, raising S$2.8 billion. The latest deal will help CapitaLand’s increased emphasis on mixed-use developments, those that include residential, commercial and retail projects, according to Standard Chartered Plc.

“CapitaLand is doing a lot more integrated projects compared to when they did the listing of CapitaMalls, so the deal is a good investment by CapitaLand,” said Singapore-based Regina Lim, head of Asian property research at Standard Chartered.

Such projects include Project Jewel, a new development at Singapore’s Changi airport where a parking lot is being turned into a shopping mall and hotel, and the Atrium@Orchard, which has retail and office space along Orchard Road.

Cheaper Offer

CapitaLand’s offer works out to about 1.2 times CapitaMalls Asia’s book value, which is cheaper than the 1.5 times book value when it listed in 2009, according to brokerage UOB Kay Hian Pte.

“The move will be near-term negative, but longer-term positive,” said Vikrant Pandey, an analyst at UOB Kay Hian in Singapore. “While this will help reduce the holding company discount that market applies in valuing CapitaLand, investors will ascribe deeper discounts for subsequent listings that CapitaLand intends to do.”

Taking the unit private would raise the earnings per share of CapitaLand Group by about 22 percent for the year ended Dec. 31, and improve the return on equity of the group to 6.7 percent from 5.4 percent for the same period, the developer said in the statement.

Changed Market

“The market has changed,” CapitaLand President Lim Ming Yan said at a press conference in Singapore today. “Earlier companies were pure play residential, now companies are emerging that are doing mixed developments which include homes, offices and malls. This move will help us compete better.”

CapitaMalls Asia owned 105 shopping malls valued at S$34.3 billion as of Dec. 31, the company said in a presentation in March. The mall owner reported a 17 percent increase in fourth-quarter profit to S$216.4 million from a year earlier. CapitaMalls Asia holds S$1 billion in cash with a net gearing of 22 percent, according to a Feb. 14 report from OCBC Investment Research.

CapitaLand completed the sale of its entire stake in Sydney-based Australand Property Group last month. The developer will use part of the about A$1.28 billion ($1.2 billion) from the sale to invest in Singapore, China and to repay debt, it said.

‘Good use’

“CapitaLand is putting the divestment proceeds from Australand to good use as there is an accretion to earnings and return on equity,” Lim at Standard Chartered said.

Standard Chartered has a buy rating on CapitaMalls because the stock is undervalued, Lim said.

CapitaLand shares declined 3.6 percent this year to April 11 when they closed at S$2.92. CapitaMalls Asia fell 7.9 percent this year to S$1.805 last week.

Singapore malls contributed 55 percent to its profit for the year ended Dec. 31 at S$405 million, followed by China, where its malls helped add S$262 million, or 35 percent of the company’s profit, CapitaMalls said. Malls in Singapore and China accounted of 86 percent of the company’s assets.

CapitaLand in February said fourth-quarter profit fell 46 percent after it recorded a loss on the sale of a stake in Australand and lower revenue from its Singapore home sales. Net income declined to S$142.9 million in the three months ended Dec. 31, from S$262.7 million a year earlier.

SHARE trading in both Wheelock Properties (S) and Hotel Properties
Ltd (HPL) was halted yesterday, sparking market speculation on what is afoot
for the companies. Wheelock has a one-fifth stake in HPL.

Among the few scenarios swirling in the market yesterday, one has
it that HPL could be taken private. Alternatively, say market watchers, a
long-speculated scenario may finally start to play out: Wheelock could
participate in a co-development of some of HPL's prized assets in the Orchard
Road belt: such as the Hilton and Four Seasons hotels, Forum and HPL House.

This speculation has been fuelled on and off ever since Wheelock
acquired a 21 per cent stake in HPL in 2006 from GuocoLand. It paid $1.80 per
HPL share for a total of $171.4 million.

Last year, Wheelock sold its 17.93 per cent stake in SC Global to
its chairman Simon Cheong, who took the luxury residential developer private.

KEPPEL Reit posted a record quarterly distributable income of
$55.1 million, up 5.5 per cent year on year, for its first quarter ended March
31, 2014.

This translated into a distribution per unit of 1.97 cents for the
quarter, unchanged from a year ago. Net property income rose 14.7 per cent to
$39.5 million.

The commercial Reit said yesterday that this was due to improved
performances from Ocean Financial Centre and Prudential Tower, as well as the
additional income from 8 Exhibition Street in Melbourne, in which it acquired a
50-per-cent stake in last August.

A better performing Marina Bay Financial Centre Phase One - which
comprises the office towers 1 and 2 as well as Marina Bay Link Mall - also
helped Keppel Reit's share of results of associates climb 12.6 per cent to $16
million.

CACHE Logistics Trust has entered into an
agreement with DHL Supply Chain Singapore to develop and lease a build-to-suit
warehouse in Tampines LogisPark at an estimated total development cost of
$105.1 million. The development will comprise two blocks with a total net
lettable area (NLA) of around 928,100 sq ft, said the real estate investment
trust's manager, ARA-CWT Trust Management (Cache) yesterday. The Reit will fund
the development with internal funds and bank borrowings, with aggregate leverage
expected to rise from 29.1 per cent at end-2013 to around 34.8 per cent on
completion of the development. Cache's total deposited property will also
increase by 8.6 per cent to $1.17 billion.

First Real
Estate Investment Trust (First Reit) posted a 14.4 per cent increase in its
distribution per unit from 1.74 cents to 1.99 cents, for the first quarter
ended March 31, 2014. Distributable income grew 22.3 per cent to $14.2 million.
Net property income for the quarter surged 29.6 per cent to $22.2 million,
while gross revenue grew 28.3 per cent to $22.5 million.

Modernisation
worldwide needs to be part of a strategy for long-term growth

Source: Business Times / Editorial & Opinion

CONSIDER a simple statistic. Every month in the developing world,
more than five million people migrate to urban areas, where jobs, schools and
opportunities of all kinds are often easier to find. But when people migrate,
the need for basic services - water, power and transport - goes with them,
highlighting the boom in infrastructure demand.

The reality is evident from Kenya to Kiribati - everywhere where
rapid urbanisation, the need to support trade and entrepreneurship, and efforts
to confront the challenges of climate change have exposed a wide infrastructure
deficit. And it is a deficit that confronts advanced economies as well.

Simply put, infrastructure construction and modernisation
worldwide needs to be part of a strategy for long-term global growth. That is
why G-20 finance ministers, meeting recently for the first time this year in
Sydney, Australia, singled out investment in infrastructure as one of the
elements vital to ensuring a strong, sustainable and balanced recovery.

But, with G-20 finance ministers preparing to meet again soon in
Washington, DC, a note of caution is in order: Simply increasing infrastructure
investment is not enough to foster growth and job creation.

IT IS
heartening to see the "sense of place" as described by Mr Mike
Sharrocks being manifest in the many heritage buildings and key spaces
conserved by the authorities in the last 30 years or so ("Retain more
heritage buildings, key spaces"; last Wednesday).

A fine example is the Old
Parliament House, which was transformed into The Arts House 10 years ago.

The building's conversion
into a living art space aimed to create a thriving arts community. Being a latent
work of art itself, this heritage building enhances the arts, culture and
literature in Singapore.

It was a treat for the
senses when I attended a "Night Walk with the Storyteller" event
recently at The Arts House to mark its 10th anniversary.

Experienced storyteller
Kamini Ramachandran led several of us on a tour of the history, heritage and
culture at the Old Parliament House.

Different levels of the
iconic 200-year-old building, previously inaccessible to the public, showcased
how and where history was made since the colonial period.

Through the oral mode of
storytelling and with the aid of printed texts, the night walk was a
"lived experience" that should be repeated more often for the benefit
of Singaporeans.

Literature is so vital to
preserving our rich heritage but we sometimes underestimate its importance in
history. It is sad that the popularity of this "language of the soul"
has declined over the years - for the poor excuse that it does not translate
into monetary gains.

I hope literature will
gain more traction as we become a more gracious society. Without literature, we
will be left with ignorance, prejudice and stereotypes.

ACCORDING to United States urban geographer Joel Kotkin, there are three
great characteristics of cities: safe, busy and sacred ("Hotel Singapore
or the Sacred Place?"; April 5).

In response to the article, Mr Mike Sharrocks called for the need to
retain more heritage buildings and key spaces beyond perceived historical,
religious and architectural values ("Retain more heritage buildings, key
spaces"; last Wednesday).

As Singapore negotiates its position in the globalised world, it is
imperative for urban planners to maintain a balance between the search for a
unique identity and economic development by involving stakeholders in their
planning.

Conservation of our built heritage has been an integral part of urban
planning in Singapore.

So far, more than 7,000 historic buildings have been gazetted for
conservation, including historic districts in Chinatown, Kampong Glam and
Little India, and colonial bungalows.

However, as Mr Sharrocks mentioned, buildings with presumably less
historical value are being demolished. These include shophouses, hawker centres
and neighbourhood libraries.

In Queenstown, Singapore's first satellite estate, pockets of vacant
land were freed from demolished flats, hawker centres, emporiums and shophouses
in the town centre in the past two decades to facilitate rejuvenation and
redevelopment.

The well-loved Tah Chung Emporium and Margaret Drive Hawker Centre were
demolished in 1999 and 2011 respectively, even though there was no imminent
development.

While some residents were unhappy with the abandoned town centre, others
were frustrated with the lack of common amenities and key spaces.

Gazetting three historical sites last year - Queenstown library, a
former wet market at Commonwealth Avenue and Alexandra Hospital - could not
reverse Queenstown's reputation as a ghost town.

Conserving or retaining the town centre would have contributed to
overall urban design heritage and the character of the community.

This is why urban planners must consult the immediate stakeholders. We
ought to consider the opportunity costs incurred while we anticipate new and
modern additions to our cityscape.

[TOKYO] Seibu Holdings, operator of Japan's biggest hotel chain,
priced a 44.5 billion yen (S$547.8 million) initial public offering at the
bottom of its planned range after two IPOs flopped last month.

The price was set at 1,600 yen a share, according to a filing
yesterday. The deal values the company at 547.4 billion yen, about 33 times
projected profit for the year ended March.

Seibu, which had disagreements with its biggest shareholder
Cerberus Capital Management, sold the shares at 30 per cent less than an
indicative price announced last month.

Takashi Goto, president of the hotel and rail operator, has pushed
to proceed with the IPO, while Cerberus said that it wanted to wait for a
higher price and ultimately decided not to offer any shares in the sale.

[BEIJING] Bucking the trend of a cooling down property market
across China, rents and sales price of grade-A office space in Beijing edged up
in the first quarter, said real estate consulting company DTZ.

Beijing's average grade-A office rents climbed to 301.03 yuan
(about S$61) per square metre in the first quarter, up 0.7 per cent from the
previous quarter, the company said in a latest report.

In the first three months, the overall average sales price for
grade-A office space in Beijing saw a 0.7-per-cent increase over the prior
quarter to 63,936 yuan psm.

"Looking forward, we expect about 300,000 square metres of
new office space to be launched by the end of 2014, which will help meet the
demand. However, leasable space in core districts is still rare and we expect
rents to increase steadily in 2014," it noted.

[LONDON] Asking prices for London homes rose to a record this
month as values increased in all but one of the capital's 32 boroughs,
according to Rightmove Plc.

Prices in the UK capital climbed 3.6 per cent from March to an
average £572,348 (S$1.2 million), taking the gain from a year earlier to almost
16 per cent, the website operator said in an e-mailed report yesterday. Across
England and Wales, values rose 2.6 per cent to £262,594 also an all-time high,
amid a lack of property for sale in southern England.

[SINGAPORE] Chinese property developers with the option to
repurchase US dollar-denominated bonds later this year may opt to do so amid
falling yields, according to Western Asset Management Co.

Shimao Property Holdings, a residential and hotel builder in
China, is considering buying back its 2017 notes, which have a call option in
August, as it considers a syndicated loan, Tammy Tam, an investor relations
official at the company, said yesterday.

Country Garden Holdings, controlled by China's richest woman Yang
Huiyan, has 11.25 per cent 2017 securities which it may redeem at any time and
from time to time on or after April 22 in whole or in part. KWG Property
Holding's 12.5 per cent bonds can be bought back in August.

Faced with dwindling funding options onshore as sales of
property-related trusts drop in the wake of the collapse last month of Zhejiang
Xingrun Real Estate Co, a builder in a city south of Shanghai, China's
developers are looking at more cost-effective ways of servicing their debt.

Growthpoint Properties Ltd. (GRT)will become the biggest shareholder in two property operators asSouth Africa’s biggest real-estate company seeks to expand its business with retail and office offerings.

As part of a 4.66 billion rand ($444 million) share-swap deal, Growthpoint will acquire 34.9 percent in Acucap Properties Ltd. (ACP) and 31.5 percent in Sycom Property Fund (SYC), the Johannesburg-based company said in a statement today. Acucap shares gained as much as 5.6 percent in Johannesburg trading while Sycom surged 11 percent. Growthpoint fell 1.9 percent.

The deal will give Growthpoint access to a portfolio of retail and office real estate worth 18.4 billion rand as the country’s fragmented property market is consolidating. South Africa’s Ascension Properties Ltd., Delta Property Fund Ltd. and Rebosis Property Fund Ltd. said in February they are considering a three-way merger, while Redefine Properties Ltd. (RDF) is in talks with Fountainhead Properties Ltd. to discuss a possible takeover.

“The past few years, we have had a listing boom and it’s natural for consolidation to happen,” Geoff Noble, a portfolio manager at Grindrod Asset Management, said in a phone interview from Durban. “The bigger the entity, the more favorable rates they have from financial institutions.”

Growthpoint is offering 1.9 of its shares for each of Acucap’s and 1.102 for each of Sycom’s. Acucap already holds 34.4 percent in Sycom, according to data compiled by Bloomberg. Growthpoint said it will issue about 191 million shares at 24.36 rand each on April 23 and May 13.

Growthpoint is exploring options to take control of the whole merged entity, Chief Executive Officer Norbert Sasse said in an e-mailed statement.